TRNC Year-End Tax Calculator
Calculate the combined corporate and income tax for your company in Northern Cyprus
Understanding TRNC Two-Stage Tax System
In the Turkish Republic of Northern Cyprus, companies are subject to Law 41/1976 Corporate Tax Law and Law 24/1982 Income Tax Law. They first pay 10% corporate tax, then 15% income tax on the remaining profit. This two-stage system creates a total effective tax rate of 23.5%.
Corporate Tax (First Stage)
Companies in Northern Cyprus are subject to a flat 10% corporate tax rate on their taxable profits.
Income Tax (Second Stage)
After corporate tax, remaining profits are subject to a 15% income tax, creating a compound tax structure.
Effective Tax Rate
The combination of both taxes results in an effective tax rate of approximately 23.5% on company profits.
TRNC Corporate Tax Calculator 2025 | 10% Corporate + 15% Income Tax | Law 41/1976 Guide
Year-End Tax Calculator
Use our interactive calculator to estimate your combined corporate and income tax liability in Northern Cyprus.
Company Details
Tax Calculation Results
Total Prepaid Tax
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Prepaid Tax Used
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Remaining Prepaid Tax
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Effective Tax Rate
%
Net Profit After All Taxes
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This calculator provides an estimation based on the standard two-tier tax system in Northern Cyprus. Actual tax liabilities may vary based on specific circumstances and exemptions. Always consult with a tax professional for precise calculations.
TRNC Tax System Explained
Understanding how the two-stage taxation works in Northern Cyprus
Two-Stage Taxation Process
| Stage | Tax Type | Rate | Applied To |
|---|---|---|---|
| First Stage | Corporate Tax | 10% |
Taxable Profit
|
| Second Stage | Income Tax | 15% |
Profit After Corporate Tax (Taxable Profit - Corporate Tax)
|
| Combined Effect | Effective Tax Rate | ≈ 23.5% |
Original Profit Before Tax
|
First Stage
10%Corporate Tax
Taxable Profit
Second Stage
15%Income Tax
Profit After Corporate Tax (Taxable Profit - Corporate Tax)
Combined Effect
≈ 23.5%Effective Tax Rate
Original Profit Before Tax
Calculation Example
For a company with a profit of ₺100,000:
- 1 Corporate Tax: ₺100,000 × 10% = ₺10,000
- 2 Profit After Corporate Tax: ₺100,000 - ₺10,000 = ₺90,000
- 3 Income Tax: ₺90,000 × 15% = ₺13,500
- 4 Total Tax: ₺10,000 + ₺13,500 = ₺23,500
- 5 Effective Tax Rate: (₺23,500 ÷ ₺100,000) × 100 = 23.5%
- 6 Net Profit After Tax: ₺100,000 - ₺23,500 = ₺76,500
Corporate and Income Tax Law Details
Key elements and legal provisions of TRNC Corporate and Income Tax legislation
Entities Subject to Tax
corporateTax.lawDetails.taxSubjects.domesticTitle
- • Capital Companies (Limited and Joint-Stock)
- • Public Economic Enterprises
- • Economic Enterprises of Associations and Foundations
- • Cooperative Companies
Foreign Entities
- • corporateTax.lawDetails.taxSubjects.foreignPE
- • corporateTax.lawDetails.taxSubjects.foreignIncome
- • corporateTax.lawDetails.taxSubjects.transportCompanies
Filing and Payment Deadlines
April or within 4 months
Filing: April or within 4 months after special accounting period
May or following month
1st Installment: May or month following filing
June 30th
Income Tax Payment: Due on June 30th
October or 6 months later
2nd Installment: October or 6 months after 1st installment
Deductible Expenses
- All reasonable and necessary business-related expenses
- Initial establishment costs (can be capitalized)
- Share and bond issuance expenses
- Donations and charity (up to 5% of net profit)
- Technical reserves for insurance companies
Non-Deductible Expenses
- Interest calculated on equity capital
- Interest on hidden capital
- All types of reserve funds (except legal provisions)
- Monetary penalties and tax penalties
- Corporate tax itself
Loss Carryforward
Prior year losses can be carried forward for 5 years and offset against future profits.
Note: Accountant certified return required
Compliance Requirements
- • Documents must be kept for 7 years
- • Accountant certification mandatory for depreciation and loss carryforward
- • Tax authority can audit 7 years retroactively
Discount for 3 Year Regular Payments
%5
- • File returns on time
- • Pay taxes on time
- • No additional assessments from audits
Frequently Asked Questions About TRNC Corporate Tax
Comprehensive guide to corporate tax - detailed answers to common questions
Under Law 41/1976, the corporate tax rate is 10%. Taxable entities include: (1) Capital companies (Limited and joint-stock companies), (2) Public economic enterprises, (3) Economic enterprises of associations and foundations, (4) Cooperative companies. Foreign entities are also taxed on income earned in TRNC.
Companies with regular accounting periods file returns in April. Those with special accounting periods must file within 4 months after period end. Corporate tax is paid in two equal installments: 1st installment in May, 2nd installment in October. Income tax (15% on profit after corporate tax) is paid separately on June 30th. Foreign company representatives must file 15 days before leaving the country.
Deductible expenses include: (1) All reasonable and necessary business operating expenses, (2) Share and bond issuance costs, (3) Initial establishment and setup costs (through depreciation if capitalized), (4) General assembly meeting, merger, dissolution and liquidation expenses, (5) Technical reserves for insurance companies.
Non-deductible items: (1) Interest calculated on equity capital, (2) Interest on hidden capital, (3) Hidden profit distributions by capital companies, (4) All types of reserve funds (except legal provisions), (5) Interest and commissions to head office (for foreign entities), (6) Corporate tax itself, monetary penalties, tax penalties and late payment charges.
Per Article 8/3, 20% of export revenues from goods or services exported from TRNC are exempt from corporate tax. However, this exemption cannot exceed 80% of net profit from exports. Requirements: (1) Exports must be actually performed, (2) Revenue must be brought into the country with bank documentation, (3) Export transactions must be recorded separately.
Under Article 8/7, companies operating in Technology Development Zones are fully exempt from corporate tax for 30 years on income from software, research and development activities. Requirements include maintaining balance sheet basis accounting and separately showing zone income.
Tax losses can be carried forward for 5 years and offset against future profits. However, per Article 29, to claim loss carryforward, the balance sheet and profit/loss statement must be certified by an authorized accountant. Loss carryforward rights are denied for non-certified returns.
Article 16: Excessive borrowings from related parties compared to equity are deemed hidden capital; interest on such loans is non-deductible. Article 17: Transactions with related parties at non-market prices (high/low prices, free transactions, excessive compensation) are deemed hidden profit distributions and subject to tax.
Per Article 40/4, taxpayers who file on time and pay taxes regularly for 3 years receive a 5% discount in subsequent periods. Requirements: (1) File returns on time, (2) Pay tax on time, (3) No additional assessments from audits. However, businesses operating under the Night Clubs and Similar Entertainment Venues Law, Gambling Law and Physical Education and Sports Law, banks (including withholding taxes on dividends paid by corporations and profit-distributing cooperative companies), finance companies and foreign exchange businesses, GSM service providers, businesses importing and delivering fuel to dealers, and businesses where more than 50% of sales consist of alcoholic beverages and cigarettes or those engaged in importing and selling alcoholic beverages and cigarettes cannot benefit from this discount.
Under Article 28, the Income and Tax Department can conduct tax audits up to 7 years after the tax period and assess missing or unpaid taxes. Therefore, all documents must be kept for at least 7 years.
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